Federal and state policymakers are considering proposals that would, for the first time, condition Medicaid eligibility on meeting a work requirement.¹   Signaling a potential policy shift in this area, the Centers for Medicare and Medicaid Services (CMS) under the Trump Administration released a March 2017 letter to state governors stating that it will use Section 1115²  authority to approve provisions involving “training, employment, and independence.”³  Medicaid work requirement proposals generally would require beneficiaries to verify their participation in approved activities, such as employment, job search, or job training programs, for a certain number of hours per week to receive health coverage.  The proposals typically would exempt certain populations, but little detail is available to date about who would qualify for these exemptions, how the policies would be administered, and who would provide work support services.  Having as many Medicaid enrollees in the workforce as possible is a worthy public goal, and in fact, many adults on Medicaid already are working.  This issue brief considers the implications of conditioning Medicaid eligibility on satisfying a work requirement, drawing on state experience with TANF enrollees subject to a work requirement over the past two decades and data about work and the role of health coverage among Medicaid enrollees today.

Lessons from the TANF Experience with Work Requirements

Medicaid work requirement proposals often refer to the Temporary Assistance for Needy Families (TANF) program as a model.  TANF provides federal block grant funding for states to assist low income parents and children.  States must require adults receiving TANF cash assistance to participate in work.  Although states have discretion in determining who must participate and the qualifying work activities, hours, and sanctions for noncompliance, states are subject to penalties if they fail to meet the TANF work performance measure.  Federal law is very prescriptive about the hours and activities in which TANF enrollees must participate in order to count toward achieving the performance measure, and calculation of the TANF work performance measure considers most adult enrollees, even if a state chooses to exempt them.  Box 1 below provides additional detail about the TANF work performance measure.

Research finds that TANF enrollees work regardless of whether they are required to do so, suggesting that a work requirement has little impact on increasing employment over the long-term.⁵  Evaluations of mandatory work programs for cash assistance enrollees that examined employment generally have found that any initial increase in employment after imposition of a work requirement faded over time.  After five years, those who were not required to work were just as likely or more likely to be working compared to those who were subject to a work requirement.⁶   These findings suggest that a work requirement is not predictive of employment.

TANF enrollees work in low wage jobs and remain poor despite being employed. TANF program evaluations have found that enrollees who were required to participate in a work program had incomes comparable to those who were not required to do so.⁷   Often, those who worked had replaced their cash assistance and food stamp dollars with dollars from earnings, but work had not lifted them out of poverty or increased their income relative to what they had received from TANF and food stamps.

Many individuals who are not working face significant employment barriers that work requirements do not address. Barriers to work often limit TANF enrollees’ employment prospects.  These barriers include physical and mental health conditions, addiction, low educational attainment, limited work experience, criminal histories that impede hiring, domestic violence, and lack of affordable reliable childcare.⁸  Given their complex health and psychosocial needs, enrollees often require additional services and supports to help them address these barriers, such as physical or mental health treatment, education or training, criminal record expungement, and child care subsidies, so they are able to work.⁹   However, few employment programs inside and outside of TANF programs provide these additional services, at least in part because they are costly to provide and resources for work programs are limited.

Even the most successful programs that offer services to address employment barriers experienced by TANF enrollees leave the majority of participants unemployed. Overall, TANF enrollees who received services to identify and address medical and educational barriers to work in New York City’s Personal Roads to Individual Development and Employment program were more likely to become employed compared to those who did not receive services.  However, nearly two-thirds of those who did receive services to address barriers never obtained employment.¹⁰   Philadelphia’s Transitional Work Corporation model initially produced higher employment rates and earnings among TANF enrollees who received job search assistance and work supports, such as case management and on-the-job mentors, compared to those who did not receive services; however, the increase faded over time. Enrollees in another Philadelphia model, the Success Through Employment Preparation program, received services to identify and address employment barriers, such as health problems or inadequate skills, but did not experience any increases in employment or earnings compared to those who did not receive services.¹¹ 

The TANF work requirement has created some unintended consequences such as substantial administrative burden on state agencies.  Administrative challenges result from the need to document, verify, and track enrollees’ participation in an approved work activity or combination of activities for the required number of hours each month.¹²   States may exempt certain enrollees from the work requirement, and administering these policies also requires time and resources.

The TANF work requirement may adversely affect enrollees who likely are eligible for an exemption based on a disability but did not obtain one.¹³  A report prepared for the U.S. Department of Health and Human Services noted that studies consistently show that TANF enrollees who are penalized for failing to meet a work requirement are more likely to have a disability compared to those who are not penalized.¹⁴   One study found that 41% of adults who left TANF but were unemployed had poor physical or mental health.¹⁵  Another report observed that individuals with severe but temporary disabilities may not be not exempt from a work requirement and may lose benefits, despite facing substantial barriers to employment as a result of their health needs.¹⁶  Research also has concluded that children of TANF enrollees who lose benefits for failure to comply with a work requirement are adversely affected.  One study found that children in these families had higher rates of behavioral health problems.¹⁷ 

Implications of a Work Requirement for Medicaid

Proponents of Medicaid work requirements describe the policies as targeting “able-bodied” adults.  However, many adults receiving Medicaid often face barriers to employment, similar to those experienced by TANF enrollees, such as physical or mental health disabilities, addiction, limited education or training, speaking a first language other than English, lack of access to affordable reliable child care and/or transportation, and domestic violence. Individuals facing these challenges require specialized supports to find and maintain employment, which Medicaid is not currently equipped to provide.  The purpose of the Medicaid program, providing health coverage, also differs from TANF; one of TANF’s express purposes is to “end the dependence of needy parents on government benefits by promoting job preparation, work, and marriage.”¹⁸ 

Because many Medicaid enrollees already are working, a work requirement is anticipated to have a small impact on increasing employment.¹⁹  Among Medicaid enrollees, nearly 6 in 10 nonelderly adults are working, without being required to do so as a condition of coverage.²⁰  In its amendment to its Section 1115 waiver extension application, Indiana proposes adding a work requirement. ²¹  However, Indiana estimates that 70% of enrollees would not be subject to the work requirement because about 1/3 of these enrollees already are working, and the remainder would qualify for an exemption because they are medically frail, in school, caring for a child, over age 60, pregnant, temporarily disabled, in substance use disorder treatment, or recently incarcerated.²²   In its Section 1115 waiver application, Maine estimates that about 7% of its Medicaid enrollees would be subject to its work requirement before taking into account those who would qualify for exemptions such as being physically or mentally unable to work.²³  Unlike Indiana, Maine has not expanded Medicaid under the ACA, so its coverage of adults is much more limited.

A work requirement will not reduce the need for health coverage through Medicaid because many of the jobs held by Medicaid enrollees do not offer health insurance.  This is one reason why many Medicaid beneficiaries already are working.  Most Medicaid adults work in industries with low offer rates for employer-sponsored insurance, such as agriculture and food service.²⁴   As a result, working does not replace the need for Medicaid coverage in the way that wages can replace cash assistance dollars in TANF, and many low income workers depend on Medicaid for health insurance coverage. In TANF, enrollees’ income from work decreases TANF costs, which is not the case in Medicaid.  In addition, access to jobs and employment benefits such as health insurance varies geographically. For example, nonelderly individuals in rural areas have a lower rate of private health insurance coverage compared to those in urban and other areas.²⁵   This reflects rural individuals’ greater employment in jobs that do not offer employer-sponsored health insurance²⁶  and the lower labor force participation rate in rural areas.

Health coverage through Medicaid is an important precursor to and support for work.  Many of the jobs held by people with low incomes involve walking, standing, lifting and carrying objects, repetitive motions, and other physical labor. Without health insurance, individuals may forgo needed services, and their health may deteriorate to a point that interferes with their ability to work.  An analysis of Ohio’s Medicaid expansion found that over half of enrollees who are working (without being required to do so) reported that having Medicaid made it easier for them to continue working.²⁷   In addition, most Ohio expansion enrollees who were unemployed but looking for work reported that having Medicaid made it easier for them to seek employment.²⁸  A study examining Michigan’s Medicaid expansion found that nearly seven in 10 (69%) enrollees who were working said they performed better at work once they got Medicaid coverage.²⁹   Over half (55%) of Michigan expansion enrollees who were not working indicated that having Medicaid coverage made them better able to look for work.³⁰   Having access to regular preventive health care to manage chronic conditions and address health issues as early as possible before they worsen is important so that individuals are healthy enough to work.  In addition, an unmet need for mental health or addiction treatment results in greater difficulty with obtaining and maintaining employment,³¹  and  Medicaid is an important source of coverage for mental health and addiction treatment services, such as opioid addiction.³² 

Most Medicaid adults who are not working report a major impediment in their ability to work or another responsibility that keeps them from working. After excluding those receiving SSI benefits, 35% of nonelderly Medicaid adults who are not working cite an illness or disability that prevents them from work.³³  Others are not currently working because they are taking care of home or family (28%), in school (18%), looking for work (8%), or retired (8%).³⁴  Medicaid work requirement proposals would not address these needs.

Similar to Medicaid’s role in supporting housing, state Medicaid programs can play a role in supporting work by providing referrals to job search or training programs without directly funding or requiring work supports.  Unlike TANF, Medicaid does not have an existing infrastructure of work support programs on which to build. While some state Medicaid programs choose to offer supported employment services to people with disabilities (such as job coaching for people with intellectual or developmental disabilities who need help to learn how to do a particular task or work independently), these programs are small.  State Medicaid programs are set up as health coverage programs, in most cases overseeing private health plans that manage and deliver medical and long-term care services – not as work programs that require the ability to conduct assessments to determine who is able to work, monitor work program participation, and develop relationships with employment and training providers and employers.  In addition, the supported employment programs that Medicaid agencies provide are focused on offering services to assist those who are unable to work without the additional support that supported employment programs provide, rather than penalizing enrollees for failing to work by disenrolling them from coverage. In contrast to Medicaid’s infrastructure, TANF and its predecessor AFDC both include core initiatives focused on job training, education, and employment for enrollees receiving cash assistance.  Medicaid’s role in supporting work is similar to its role in supporting housing.³⁵   Medicaid funds cannot be used to directly fund housing, but Medicaid can provide services that support people with disabilities and those who are homeless with obtaining and maintaining housing and living independently.  Similarly, Medicaid can provide referrals to voluntary work search and training programs and cover the services needed to keep people healthy and enable them to work.

While TANF spending on work activities and supports is critiqued by some as too low, it exceeds estimates of state Medicaid program spending to implement a work requirement. In 2015, states spent an average of $3,223 per work slot per year to provide work activities and supports (such as transportation and uniforms, but not including child care) for TANF enrollees who were required to work.³⁶   For comparison, as part of its Medicaid work requirement proposal, Indiana has requested Section 1115 waiver expenditure authority to use federal Medicaid funds for orientation, assessment, job skills training, job search assistance, and tracking enrollee progress at an estimated cost of $90 per enrollee per month (or $1,080 per year).³⁷  Other state waiver requests proposing Medicaid work requirements have not included spending estimates. For example, Arkansas indicates that it would work with its state department of workforce services to provide employment services for Medicaid enrollees subject to a work requirement.³⁸   However, state workforce development programs do not have adequate funding and capacity to serve all of the individuals who would be subject to a Medicaid work requirement, and the President’s budget proposes cutting funds for the programs that currently provide job search and training assistance to unemployed and underemployed individuals.  States need waiver authority to spend federal Medicaid funds on work requirements because these programs are beyond the scope of the medical and long-term care services that Medicaid can cover under federal law.

Medicaid work requirements can create additional administrative complexity and costs for states.  States will have to devote their already limited staff and resources to tracking work program participation or incur the additional cost of contracting out that function.  A draft operational protocol prepared for implementation of Kentucky’s proposed waiver that includes a work requirement illustrates the complexity involved. The state needs to create systems to share information about work participation and exemptions between the new “community engagement module,” the state’s Medicaid eligibility and claims processing systems, health plans, providers, and enrollees.³⁹   Some exemption categories are temporary and must be re-evaluated and documented on a monthly basis.⁴⁰   Kentucky recently amended its Medicaid work requirement proposal, citing administrative complexity as the reason for moving from a graduated work requirement (beginning at 5 hours/week and increasing to a maximum 20 hours/week) to a flat 20 hours/week.⁴¹   In its response to state-level public comments on its waiver amendment proposing a work requirement, Arkansas indicated that it  “has conducted extensive planning on systems changes and other administrative issues” over the past six months in preparation.⁴²   Arkansas acknowledged that administering a work requirement requires the state to build a new electronic portal for enrollee reporting, establish a process to identify a “catastrophic event” and refine its definition of “incapacitated” to exempt enrollees from the work requirement, and develop educational materials.⁴³   The process to verify and document work requirement compliance and exemptions also could lead eligible Medicaid beneficiaries to lose coverage and experience interruptions or delays in accessing needed health care.⁴⁴ 

Looking Ahead

Having as many Medicaid enrollees in the workforce as possible is a worthy public goal, and in fact, many adults on Medicaid already are working.  The TANF experience demonstrates that many individuals who are not working face significant employment barriers and a work requirement might result in eligible people losing coverage.  Medicaid can play a key role in ensuring that people who are able to work have the necessary supports, such as health coverage, to do so. In addition to fundamentally changing the Medicaid program, conditioning eligibility for health coverage on satisfying a work requirement, and terminating coverage for those who are unable to comply, is unlikely to result in substantial gains in employment, may contribute to administrative burdens, and could penalize the people who most need the health coverage that Medicaid provides.

1. While the future of federal legislation affecting Medicaid is unclear at this time, the American Health Care Act passed by the House of Representatives and the Better Care Reconciliation Act considered by the Senate both included a state option to require certain Medicaid adults to participate in approved work activities. Kaiser Family Foundation, Compare Proposals to Replace the Affordable Care Act,  http://modern.kff.org/interactive/proposals-to-replace-the-affordable-care-act/.  Separately, some states are seeking Section 1115 waiver authority for Medicaid work requirements for adults newly eligible for coverage under the Affordable Care Act’s Medicaid expansion as well as for traditional Medicaid populations, such as low-income parents, those eligible for family planning services, and young adults aging out of foster care. Under the Obama Administration, CMS rejected state waiver requests for work requirements applied to Medicaid expansion adults as inconsistent with the program’s objectives to provide health coverage and care.  Kaiser Family Foundation, Section 1115 Medicaid Expansion Waivers:  A Look at Key Themes and State Specific Waiver Provisions (Aug. 2017), http://modern.kff.org/medicaid/issue-brief/section-1115-medicaid-expansion-waivers-a-look-at-key-themes-and-state-specific-waiver-provisions/; Kaiser Family Foundation, Proposed Medicaid Section 1115 Waivers in Maine and Wisconsin (July, 2017), http://modern.kff.org/medicaid/issue-brief/proposed-medicaid-section-1115-waivers-in-maine-and-wisconsin/; Kaiser Family Foundation,  Medicaid and Work Requirements (March, 2017), http://modern.kff.org/medicaid/issue-brief/medicaid-and-work-requirements/; Kaiser Family Foundation, Three Key Questions:  Section 1115 Medicaid Demonstration Waivers (Feb. 2017), http://modern.kff.org/medicaid/issue-brief/3-key-questions-section-1115-medicaid-demonstration-waivers/.    ↩︎
2. Section 1115 authorizes the Health and Human Services Secretary to authorize demonstration projects that test new approaches not otherwise permissible under federal law that, in Secretary’s judgment, advance program objectives.  Some states have created voluntary job training and referral programs for Medicaid adults, but CMS under the Obama Administration noted that these are state-funded programs separate from approved Medicaid expansion waivers. ↩︎
3. Letter from HHS Secretary Thomas E. Price and CMS Administrator Seema Verma to State Governors (March 2017), https://www.hhs.gov/sites/default/files/sec-price-admin-verma-ltr.pdf. ↩︎
4. 42 U.S.C. § 607. ↩︎
5. Some of this research looked at the AFDC program, the predecessor to TANF. ↩︎
6. Gayle Hamilton et al., National Evaluation of Welfare-to-Work Strategies: How Effective are Difference Welfare-to-Work Approaches? Five-Year Adult and Child Impacts for Eleven Programs, (Washington, DC: Manpower Demonstration Research Corporation, December 2001), http://www.mdrc.org/sites/default/files/full_391.pdf. ↩︎
7. Id. ↩︎
8. Kelley Bowden and Daisy Goodman, “Barriers to Employment for Drug Dependent Postpartum Women,” Work 50, 3(2015): 425-32; Dan Bloom, Pamela J. Loprest, and Sheila R. Zedlewski, TANF Recipients with Barriers to Employment (Washington, DC: Urban Institute, May 2012), http://www.urban.org/research/publication/tanf-recipients-barriers-employment; Benjamin G. Druss and Elizabeth Reisinger Walker, Mental disorders and medical comorbidity, (Princeton, NJ: The Robert Wood Johnson Foundation, February 2011), http://www.integration.samhsa.gov/workforce/mental_disorders_and_medical_comorbidity.pdf; Judith A. Cook, “Employment Barriers for Persons with Psychiatric Disabilities: Updated of a Report for the President’s Commission,” Psychiatric Services 57, 10(2006):1391-405; Ellen Meara, “Welfare Reform, Employment, and Drug and Alcohol Use Among Low-Income Women,” Harvard Review of Psychiatry 14, 4(2006): 223-32. ↩︎
9. John Martinez et al., Results from the Substance Abuse Case Management Program in New York City (New York, NY: MDRC, May, 2009), https://www.mdrc.org/sites/default/files/full_551.pdf; The National Center on Addiction and Substance Abuse at Columbia University, CASASARDSM: Intensive Case Management for Substance-Dependent Women Receiving Temporary Assistance for Needy Families (New York, NY: The National Center on Addiction and Substance Abuse at Columbia University, January 2009), https://www.centeronaddiction.org/addiction-research/reports/casasard-intensive-case-management-substance-dependent-women-receiving; Dan Bloom et al., Alternative Welfare-to-Work Strategies for the Hard-to-Employ (New York, NY: MDRC, October 2009), http://www.mdrc.org/sites/default/files/full_19.pdf; Dan Bloom, Cynthia Miller, and Gilda Azurdia, Results from the Personal Roads to Individual Development and Employment (PRIDE) Program in New York City (New York, NY: MDRC, July 2007), http://www.mdrc.org/sites/default/files/full_547.pdf. ↩︎
10. Dan Bloom, Cynthia Miller, and Gilda Azurdia, Results from the Personal Roads to Individual Development and Employment (PRIDE) Program in New York City (New York, NY: MDRC, July 2007), http://www.mdrc.org/sites/default/files/full_547.pdf. ↩︎
11. Dan Bloom et al., Alternative Welfare-to-Work Strategies for the Hard-to-Employ (New York, NY: MDRC, October 2009), http://www.mdrc.org/sites/default/files/full_19.pdf. ↩︎
12. Government Accountability Office, Temporary Assistance for Needy Families: Potential Options to Improve Performance and Oversight (Washington, DC: Government Accountability Office, May 2013), http://www.gao.gov/assets/660/654614.pdf. ↩︎
13. Some people may have physical or mental health conditions that limit functioning in ways that create barriers to work, yet do not rise to the level of severity required to qualify for SSI benefits. ↩︎
14. Mathematica Policy Research, Assisting TANF Recipients Living with Disabilities to Obtain and Maintain Employment:  Conducting In-Depth Assessments (Feb. 2008), https://www.acf.hhs.gov/sites/default/files/opre/conducting_in_depth.pdf. ↩︎
15. Pamela Loprest, Disconnected Welfare Leavers Face Serious Risks (Washington, DC: Urban Institute, 2002), http://www.urban.org/sites/default/files/publication/59036/310839-Disconnected-Welfare-Leavers-Face-Serious-Risks.PDF. ↩︎
16. Sharon Parrott, The New TANF Requirements and Individuals with Disabilities (Washington, DC: Center on Budget and Policy Priorities, March 2007), http://www.cbpp.org/research/the-new-tanf-requirements-and-individuals-with-disabilities. ↩︎
17. Brenda J. Lohman et al., “Welfare Reform: What About the Children,” Welfare, Children & Families 02-1(2002): 1-8. ↩︎
18. 42 U.S.C. § 601. ↩︎
19. Drew Altman, Don’t Expect Medicaid Work Requirements to Make a Big Difference  Axios (April 2017), https://modern.kff.org/medicaid/perspective/dont-expect-medicaid-work-requirements-to-make-a-big-difference/. ↩︎
20. Excludes those receiving SSI benefits.  Kaiser Family Foundation, Understanding the Intersection of Medicaid and Work (Feb. 2017), http://modern.kff.org/medicaid/issue-brief/understanding-the-intersection-of-medicaid-and-work/. ↩︎
21. Ind. Family & Soc. Servs. Admin.  Amendment Request to Healthy Indiana Plan Section 1115 Waiver Extension Application (July 20, 2017), https://www.medicaid.gov/Medicaid-CHIP-Program-Information/By-Topics/Waivers/1115/downloads/in/in-healthy-indiana-plan-support-20-pa5.pdf. ↩︎
22. Id.  ↩︎
23. Maine Dep’t of Health & Human Servs. 1115 Waiver Application (Aug. 2, 2017), http://www.maine.gov/dhhs/oms/rules/MaineCare_1115_application_080217_to%20submit.pdf. ↩︎
24. Kaiser Family Foundation, Understanding the Intersection of Medicaid and Work (Feb. 2017), http://modern.kff.org/medicaid/issue-brief/understanding-the-intersection-of-medicaid-and-work/. ↩︎
25. Kaiser Family Foundation, The Role of Medicaid in Rural America (April 2017), http://modern.kff.org/medicaid/issue-brief/the-role-of-medicaid-in-rural-america/. ↩︎
26. Kaiser Family Foundation analysis of 2015 American Community Survey 1-Year Estimates. ↩︎
27. Kaiser Family Foundation, The Effects of Medicaid Expansion under the ACA:  Updated Findings from a Literature Review (Feb. 2017), http://modern.kff.org/medicaid/issue-brief/the-effects-of-medicaid-expansion-under-the-aca-updated-findings-from-a-literature-review/. ↩︎
28. Id. ↩︎
29. Univ. of Mich. Institute for Healthcare Pol’y & Innovation, Medicaid Expansion Helped Enrollees Do Better at Work or in Job Searches (June 2017), http://ihpi.umich.edu/news/medicaid-expansion-helped-enrollees-do-better-work-or-job-searches. ↩︎
30. Id.  ↩︎
31. National Institute on Drug Abuse, Consequences of Drug Misuse (Bethesda, MD: National Institute on Drug Abuse, March 2017), https://www.drugabuse.gov/related-topics/health-consequences-drug-misuse; Neil Jordan et al., “Economic Benefit of Chemical Dependency Treatment to Employers,” Journal of Substance Abuse Treatment 34, 3(2008):311-319; Ronald C. Kessler et al., “Depression in the Workplace: Effects on Short-term Disability,” Health Affairs (Millwood) 18, 5(1999):163-71; Cheryl J. Cherpitel and Yu Ye, “Drug Use and Problem Drinking Associated with Primary Care and Emergency Room Utilization in the US General Population: Data from the 2005 National Alcohol Survey,” Drug and Alcohol Dependence 97 3(2008):226-30; Doris J. James and Lauren E. Glaze, Mental Health Problems of Prison and Jail Inmates (Washington, DC: US Department of Justice, December 2006), https://www.bjs.gov/content/pub/pdf/mhppji.pdf. ↩︎
32. Kaiser Family Foundation, Medicaid’s Role in Addressing the Opioid Epidemic (June 2017); Kaiser Family Foundation, Medicaid’s Role in Behavioral Health (May 2017). ↩︎
33. Kaiser Family Foundation, Understanding the Intersection of Medicaid and Work (Feb. 2017), http://modern.kff.org/medicaid/issue-brief/understanding-the-intersection-of-medicaid-and-work/. ↩︎
34. Id.  ↩︎
35. See, e.g., Kaiser Family Foundation, Linking Medicaid and Supportive Housing:  Opportunities and On-the-Ground Examples (Jan. 2017), http://modern.kff.org/report-section/linking-medicaid-and-supportive-housing-issue-brief/. ↩︎
36. Calculated based on $2.9 billion total annual TANF spending on work activities and supports in 2015, https://www.cbpp.org/research/family-income-support/how-states-use-funds-under-the-tanf-block-grant, for 930,000 people required to participate in TANF work activities each month in 2015, https://www.acf.hhs.gov/ofa/resource/work-participation-rates-fiscal-year-2015 (Table 4B).  A work slot may be occupied by more than one person over the course of a year. ↩︎
37. Kaiser Family Foundation, Section 1115 Medicaid Expansion Waivers:  A Look at Key Themes and State Specific Waiver Provisions (Aug. 2017), http://modern.kff.org/medicaid/issue-brief/section-1115-medicaid-expansion-waivers-a-look-at-key-themes-and-state-specific-waiver-provisions/. ↩︎
38. Proposed Amendment to Ark. Works Section 1115 Medicaid waiver (June 2017), https://www.medicaid.gov/Medicaid-CHIP-Program-Information/By-Topics/Waivers/1115/downloads/ar/ar-works-pa2.pdf. ↩︎
39. Kentucky HEALTH Program Requirements Specification (April 4, 2017 draft), http://media.mcguirewoods.com/mwc/kentucky-medicaid-expansion-2.pdf (see especially pp. 34-44). ↩︎
40. Id. at 35. ↩︎
41. Kaiser Family Foundation, Proposed Changes to Medicaid Expansion in Kentucky (Aug. 2017), http://modern.kff.org/medicaid/fact-sheet/proposed-changes-to-medicaid-expansion-in-kentucky/. ↩︎
42. Ark. Proposed Amendment to Ark. Works Section 1115 Medicaid waiver (June 2017), https://www.medicaid.gov/Medicaid-CHIP-Program-Information/By-Topics/Waivers/1115/downloads/ar/ar-works-pa2.pdf. ↩︎
43. Id.  ↩︎
44. Sara Rosenbaum et al.  What Might a Medicaid Work Requirement Mean? (May 31, 2017), http://www.commonwealthfund.org/publications/blog/2017/may/medicaid-work-requirement. ↩︎

While the future of legislation to repeal and replace the Affordable Care Act (ACA) and make fundamental changes to the structure and funding of the Medicaid program is uncertain, states and the Administration may achieve major changes to Medicaid through the use of Section 1115 Medicaid waivers. Section 1115 Medicaid demonstration waivers provide states with an avenue to test new approaches that further the objectives of the Medicaid program in ways that differ from what states can do under current law. On March 14, 2017, the Centers for Medicare and Medicaid Services (CMS) sent a letter to state governors that signaled a willingness to use Section 1115 authority to “support innovative approaches to increase employment and community engagement” and “align Medicaid and private insurance policies for non-disabled adults.” Wisconsin submitted a waiver amendment request to CMS in June 2017 and Maine submitted a waiver application to CMS in August 2017.

Unlike previous waivers that encompass the ACA’s Medicaid expansion, Wisconsin and Maine are seeking waiver authority to make significant changes to Medicaid that would affect non-expansion Medicaid populations. The proposals seek to impose welfare-like restrictions and make other changes to eligibility and enrollment, premiums and cost-sharing, and benefits to traditional populations that are not allowed under current law. Maine’s changes would primarily affect traditional Medicaid adults, such as low-income parents (up to 105% of the federal poverty level, FPL, $20,420/year for a family of 3 in 2017), former foster care youth, those receiving Transitional Medical Assistance, those receiving only family planning services, and people with HIV up to 250% FPL ($30,050/year for an individual in 2017). Wisconsin’s changes would affect childless adults up to 100% FPL ($12,060/year for an individual in 2017), who are covered under an existing waiver at the state’s regular federal matching rate, rather than through the ACA’s Medicaid expansion.

Wisconsin and Maine’s proposals include provisions that have not been approved in any state (such as work requirements, drug testing, and time limits). Previously, CMS had not approved state waiver requests to require that Medicaid beneficiaries work as a condition of eligibility, on the basis that such a provision would not further the program’s purposes of promoting health coverage and access. Maine and Wisconsin’s waiver proposals also include other provisions that have not been approved to date including drug screening and testing (WI), and eligibility time limits (both states).

A number of provisions have never been approved for traditional, non-expansion populations (such as lock-outs for failure to pay premiums). Some policies, such as authority to impose premiums (as well as premium reductions for beneficiaries who participate in healthy behavior programs), eliminate non-emergency medical transportation, and eliminate retroactive eligibility, have been approved in some Section 1115 Medicaid expansion waiver states. Indiana also has Section 1916 (f) waiver authority to test graduated copayments of $25 for non-emergency use of the emergency room with a control group. However, no Section 1115 waivers approved to date for any Medicaid population include premiums as a condition of eligibility or coverage lock-outs for non-payment for those under 100% FPL.

Several provisions included in Maine and Wisconsin’s proposals are being tested and evaluated in other states’ waivers, with preliminary data and evidence of negative consequences for beneficiaries and administrative costs and complexities for states, health plans, and providers. Available data about healthy behavior programs in Iowa, Michigan, and Indiana suggest that complicated provisions require extensive administrative resources and beneficiary education to implement.  Additionally, Indiana’s health accounts, coverage lock-out for premium non-payment, and requirement that individuals pay a premium before coverage starts result in some eligible individuals not accessing or losing coverage. A substantial body of research cites access to care barriers created by premiums and cost-sharing. Some conservative policymakers contend that work requirements are ineffective in the health care context, while others contend that such requirements may be ineffective over the long-term in the TANF program on which the proposals are modeled. An assessment of state drug testing programs in TANF found high administrative costs with few drug users identified.

Both states’ waiver proposals estimate less coverage under the waiver. Under its waiver proposal, Wisconsin projects that enrollment will be 5,102 lower under the waiver compared to without waiver estimates in the fifth year of the demonstration. Of this reduction, 4,262 would be disenrolled from the time limit and 840 from the premiums. The state assumed 2-4% reduction in enrollment due to premiums, pointing to research that demonstrates a 5% rate of premium non-payment. A large body of research shows that premiums can serve as a barrier to obtaining and maintaining Medicaid and CHIP coverage among low-income individuals, particularly those with incomes below poverty. Maine anticipates that its proposed waiver would cover 55,000 fewer eligible member months but with an increase in per member per month costs from $799 to $815, comparing the “without waiver” estimates to the “with waiver estimates” in the fifth year of the waiver. Maine estimates that the number of covered beneficiaries would decline regardless of waiver implementation but that the decline “may slightly increase over the short-term” due to the waiver provisions. Maine also estimates that costs will increase because the “able-bodied” adults expected to lose eligibility under the waiver have lower costs compared to other coverage groups. Under long-standing policy, CMS has required Section 1115 waivers to be budget neutral to the federal government, meaning that federal costs under the waiver should not exceed what they would have been absent the waiver.

Review of these waiver proposals could be on a fast timeline. Wisconsin seeks to amend an existing waiver (with some proposed changes required by state law), while Maine is requesting a new waiver. Wisconsin received 1,043 comments at the state level and made some minor adjustments to the amendment (e.g., to monthly premiums, emergency room copays, and drug screening and testing provisions) before submitting to CMS. Maine received comments from 180 people, over ¾ of which were opposed to the waiver. Before submitting the waiver to CMS, Maine made some changes related to premiums (imposing flat fee premiums for income bands starting at 51% FPL and exempting those enrolled through breast and cervical cancer), the ED copay (lowered from $20 to $10 and provides a list of exempt diagnosis codes), the work requirement (exempts those with breast and cervical cancer and those caring for an incapacitated adult), removal of the missed appointment assessment and excluding long-term care services from retroactive eligibility waiver.  If approved by CMS, Maine estimates it would be ready for implementation six months after receiving approval, while Wisconsin would implement no sooner than one year later. Key proposed waiver provisions in each state are compared in Table 1 below, with more detail about each state’s proposal provided in the Appendix.

KEY FINDINGS:

• The August Kaiser Health Tracking Poll finds that the majority of the public (60 percent) say it is a “good thing” that the Senate did not pass the bill that would have repealed and replaced the ACA. Since then, President Trump has suggested Congress not take on other issues, like tax reform, until it passes a replacement plan for the ACA, but six in ten Americans (62 percent) disagree with this approach, while one-third (34 percent) agree with it.
• A majority of the public (57 percent) want to see Republicans in Congress work with Democrats to make improvements to the 2010 health care law, while smaller shares say they want to see Republicans in Congress continue working on their own plan to repeal and replace the ACA (21 percent) or move on from health care to work on other priorities (21 percent). However, about half of Republicans and Trump supporters would like to see Republicans in Congress keep working on a plan to repeal the ACA.
• A large share of Americans (78 percent) think President Trump and his administration should do what they can to make the current health care law work while few (17 percent) say they should do what they can to make the law fail so they can replace it later. About half of Republicans and supporters of President Trump say the Trump administration should do what they can to make the law work (52 percent and 51 percent, respectively) while about four in ten say they should do what they can to make the law fail (40 percent and 39 percent, respectively). Moving forward, a majority of the public (60 percent) says President Trump and Republicans in Congress are responsible for any problems with the ACA.
• Since Congress began debating repeal and replace legislation, there has been news about instability in the ACA marketplaces. The majority of the public are unaware that health insurance companies choosing not to sell insurance plans in certain marketplaces or health insurance companies charging higher premiums in certain marketplaces only affect those who purchase their own insurance on these marketplaces (67 percent and 80 percent, respectively). In fact, the majority of Americans think that health insurance companies charging higher premiums in certain marketplaces will have a negative impact on them and their family, while fewer (31 percent) say it will have no impact.
• A majority of the public disapprove of stopping outreach efforts for the ACA marketplaces so fewer people sign up for insurance (80 percent) and disapprove of the Trump administration no longer enforcing the individual mandate (65 percent). While most Republicans and Trump supporters disapprove of stopping outreach efforts, a majority of Republicans (66 percent) and Trump supporters (65 percent) approve of the Trump administration no longer enforcing the individual mandate.
• The majority of Americans (63 percent) do not think President Trump should use negotiating tactics that could disrupt insurance markets and cause people who buy their own insurance to lose health coverage, while three in ten (31 percent) support using whatever tactics necessary to encourage Democrats to start negotiating on a replacement plan. The majority of Republicans (58 percent) and President Trump supporters (59 percent) support these negotiating tactics while most Democrats, independents, and those who disapprove of President Trump do not (81 percent, 65 percent, 81 percent).
• This month’s survey continues to find that more of the public holds a favorable view of the ACA than an unfavorable one (52 percent vs. 39 percent). This marks an overall increase in favorability of nine percentage points since the 2016 presidential election as well as an increase of favorability among Democrats, independents, and Republicans.

Attitudes Towards Recent “Repeal and Replace” Efforts

In the early morning hours of July 28, 2017, the U.S. Senate voted on their latest version of a plan to repeal and replace the 2010 Affordable Care Act (ACA). Known as “skinny repeal,” this plan was unable to garner majority support– thus temporarily halting Congress’ ACA repeal efforts. The August Kaiser Health Tracking Poll, fielded the week following the failed Senate vote, finds that a majority of the public (60 percent) say it is a “good thing” that the U.S. Senate did not pass a bill aimed at repealing and replacing the ACA, while about one-third (35 percent) say this is a “bad thing.” However, views vary considerably by partisanship with a majority of Democrats (85 percent), independents (62 percent), and individuals who say they disapprove of President Trump (81 percent) saying it is a “good thing” that the Senate did not pass a bill compared to a majority of Republicans (64 percent) and individuals who say they approve of President Trump (65 percent) saying it is a “bad thing” that the Senate did not pass a bill.

The majority of those who view the Senate not passing an ACA replacement bill as a “good thing” say they feel this way because they do not want the 2010 health care law repealed (34 percent of the public overall) while a smaller share (23 percent of the public overall) say they feel this way because, while they support efforts to repeal and replace the ACA, they had specific concerns about the particular bill the Senate was debating.

And while most Republicans and supporters of President Trump say it is a “bad thing” that the Senate did not pass ACA repeal legislation, for those that say it is a “good thing” more Republicans say they had concerns about the Senate’s particular legislation (21 percent) than say they do not want the ACA repealed (6 percent). This is also true among supporters of President Trump (19 percent vs. 6 percent).

Who Do People Blame or Credit for the Senate Bill Failing to Pass?

Among those who say it is a “good thing” that the Senate was unable to pass ACA repeal and replace legislation, similar shares say the general public who voiced concerns about the bill (40 percent) and the Republicans in Congress who voted against the bill (35 percent) deserve most of the credit for the bill failing to pass. This is followed by a smaller share (14 percent) who say Democrats in Congress deserve the most credit.

On the other hand, among those who say it is a “bad thing” that the Senate did not pass a bill to repeal the ACA, over a third place the blame on Democrats in Congress (37 percent). About three in ten (29 percent) place the blame on Republicans in Congress while fewer (15 percent) say President Trump deserves most of the blame for the bill failing to pass.

Half of the Public Are “Relieved” or “Happy” The Senate Did Not Repeal and Replace the ACA

More Americans say they are “relieved” (51 percent) or “happy” (47 percent) that the Senate did not pass a bill repealing and replacing the ACA, than say they are “disappointed” (38 percent) or “angry” (19 percent).

Although two-thirds of Republicans and Trump supporters say they feel “disappointed” about the Senate failing to pass a bill to repeal and replace the ACA, smaller shares (30 percent and 37 percent, respectively) report feeling “angry” about the failure to pass the health care bill.

Majority Say President Trump and Republicans in Congress Are Responsible for the ACA Moving Forward

With the future of any other replacement plans uncertain, the majority (60 percent) of the public say that because President Trump and Republicans in Congress are now in control of the government, they are responsible for any problems with the ACA moving forward, compared to about three in ten Americans (28 percent) who say that because President Obama and Democrats in Congress passed the law, they are responsible for any problems with it. Partisan divisiveness continues with majorities of Republicans and supporters of President Trump who say President Obama and Democrats are responsible for any problems with it moving forward, while large shares of Democrats, independents, and those who do not approve of President Trump say President Trump and Republicans in Congress are responsible for the law moving forward.

Moving Past Repealing The Affordable Care Act

This month’s survey continues to find that more of the public holds a favorable view of the ACA than an unfavorable one (52 percent vs. 39 percent). This marks an overall increase in favorability since Congress began debating ACA replacement plans and a nine percentage point shift since the 2016 presidential election.

The shift in attitudes since the 2016 presidential election is found regardless of party identification. For example, the share of Republicans who have a favorable view of the ACA has increased from 12 percent in November 2016 to 21 percent in August 2017. This is similar to the increase in favorability among independents (11 percentage points) and Democrats (7 percentage points) over the same time period.

Next Steps For The ACA

The most recent Kaiser Health Tracking Poll finds that after the U.S. Senate was unable to pass a plan to repeal and replace the ACA, the majority of the public (57 percent) wants to see Republicans in Congress work with Democrats to make improvements to the 2010 health care law but not repeal it. Far fewer want to see Republicans in Congress continue working on their own plan to repeal and replace the ACA (21 percent) or move on from health care to work on other priorities (21 percent). About half of Republicans (49 percent) and Trump supporters (46 percent) want Republicans in Congress to continue working on their own plan to repeal and replace the ACA, but about a third of each say they would like to see Republicans work with Democrats on improvements to the ACA.

Six in ten Americans (62 percent) disagree with President Trump’s strategy of Congress not taking on other issues, like tax reform, until it passes a replacement plan for the ACA while one-third (34 percent) of the public agree with this approach. Republicans and Trump supporters are more divided in their opinion on this strategy with similar shares saying they agree and disagree with the approach.

Most Want to See President Trump and Republicans Make the Current Health Care Law Work

Regardless of their opinions of the ACA, the majority of the public want to see the 2010 health care law work. Eight in ten (78 percent) Americans think President Trump and his administration should do what they can to make the current health care law work while fewer (17 percent) say President Trump and his adminstration should do what they can to make the law fail so they can replace it later. About half of Republicans and supporters of President Trump say the Trump administration should do what they can to make the law work (52 percent and 51 percent, respectively) while about four in ten say they should do what they can to make the law fail (40 percent and 39 percent, respectively).

This month’s survey also includes questions about specific actions that the Trump administration can take to make the ACA fail and finds that the majority of the public disapproves of the Trump Administration stopping outreach efforts for the ACA marketplaces so fewer people sign up for insurance (80 percent) and no longer enforcing the individual mandate, the requirement that all individuals have insurance or pay a fine (65 percent). While most Republicans and Trump supporters disapprove of President Trump stopping outreach efforts so fewer people sign up for insurance, which experts say could weaken the marketplaces, a majority of Republicans (66 percent) and Trump supporters (65 percent) approve of the Trump administration no longer enforcing the individual mandate.

The Future of the ACA Marketplaces

About 10.3 million people have health insurance that they purchased through the ACA exchanges or marketplaces, where people who don’t get insurance through their employer can shop for insurance and compare prices and benefits.¹  Seven in ten (69 percent) say it is more important for President Trump and Republicans’ next steps on health care to include fixing the remaining problems with the ACA in order to help the marketplaces work better, compared to three in ten (29 percent) who say it is more important for them to continue plans to repeal and replace the ACA.

The majority of Republicans (61 percent) and Trump supporters (63 percent) say it is more important for President Trump and Republicans to continue plans to repeal and replace the ACA, while the vast majority of Democrats (90 percent) and seven in ten independents (69 percent) want them to fix the ACA’s remaining problems to help the marketplaces work better.

Uncertainty Remains on Who is Impacted by Issues in the ACA Marketplaces

Since Congress began debating repeal and replace legislation, there has been news about instability in the ACA marketplaces which has led some insurance companies to charge higher premiums in certain marketplaces.  Six in ten Americans think that health insurance companies charging higher premiums in certain marketplaces will have a negative impact on them and their family, while fewer (31 percent) say it will have no impact.

There has also been news about insurance companies no longer selling coverage in the individual insurance marketplaces and currently, it’s estimated that 17 counties (9,595 enrollees) are currently at risk to have no insurer on the ACA marketplaces in 2018.²  The majority of the public (54 percent) say health insurance companies choosing not to sell insurance plans in certain marketplaces will have no impact on them and their family. Yet, despite the limited number of counties that may not have an insurer in their marketplaces as well as this not affecting those with employer sponsored insurance where most people obtain health insurance, about four in ten (38 percent) of the public believe that health insurance companies choosing to not sell insurance plans in certain marketplaces will have a negative impact on them and their families.

The majority of the public think both of these ACA marketplace issues will affect everyone who has health insurance and not just those who purchase their insurance on these marketplaces. Six in ten think health insurance companies choosing not to sell insurance plans in certain marketplaces will affect everyone who has health insurance while about one-fourth (26 percent) correctly say it only affects those who buy health insurance on their own. In addition, three-fourths (76 percent) of the public say that health insurance companies charging higher premiums in certain marketplaces will affect everyone who has health insurance while fewer (17 percent) correctly say it will affect only those who buy health insurance on their own.

Majority Say President Trump Should Not Use Cost-Sharing Reduction Payments as Negotiating Strategy

Over the past several months President Trump has threatened to stop the payments to insurance companies that help cover the cost of health insurance for lower-income Americans (known commonly as CSR payments), in order to get Democrats to start working with Republicans on an ACA replacement plan.³  The majority of Americans (63 percent) do not think President Trump should use negotiating tactics that could disrupt insurance markets and cause people who buy their own insurance to lose health coverage, while three in ten (31 percent) support President Trump using whatever tactics necessary to encourage Democrats to start negotiating. The majority of Republicans (58 percent) and President Trump supporters (59 percent) support negotiating tactics while most Democrats, independents, and those who disapprove of President Trump do not (81 percent, 65 percent, 81 percent).

This Kaiser Health Tracking Poll was designed and analyzed by public opinion researchers at the Kaiser Family Foundation (KFF). The survey was conducted August 1-6, 2017, among a nationally representative random digit dial telephone sample of 1,211 adults ages 18 and older, living in the United States, including Alaska and Hawaii (note: persons without a telephone could not be included in the random selection process). Computer-assisted telephone interviews conducted by landline (428) and cell phone (783, including 487 who had no landline telephone) were carried out in English and Spanish by SSRS of Media, PA. Both the random digit dial landline and cell phone samples were provided by Marketing Systems Group (MSG). For the landline sample, respondents were selected by asking for the youngest adult male or female currently at home based on a random rotation. If no one of that gender was available, interviewers asked to speak with the youngest adult of the opposite gender. For the cell phone sample, interviews were conducted with the adult who answered the phone. KFF paid for all costs associated with the survey.

The combined landline and cell phone sample was weighted to balance the sample demographics to match estimates for the national population using data from the Census Bureau’s 2015 American Community Survey (ACS) on sex, age, education, race, Hispanic origin, and region along with data from the 2010 Census on population density. The sample was also weighted to match current patterns of telephone use using data from the July-December 2016 National Health Interview Survey. The weight takes into account the fact that respondents with both a landline and cell phone have a higher probability of selection in the combined sample and also adjusts for the household size for the landline sample. All statistical tests of significance account for the effect of weighting.

The margin of sampling error including the design effect for the full sample is plus or minus 3 percentage points. Numbers of respondents and margins of sampling error for key subgroups are shown in the table below. For results based on other subgroups, the margin of sampling error may be higher. Sample sizes and margins of sampling error for other subgroups are available by request. Note that sampling error is only one of many potential sources of error in this or any other public opinion poll. Kaiser Family Foundation public opinion and survey research is a charter member of the Transparency Initiative of the American Association for Public Opinion Research.

1. Kaiser Family Foundation, as of August 9, 2017. http://modern.kff.org/health-reform/state-indicator/total-marketplace-enrollment-and-financial-assistance/?currentTimeframe=0&sortModel=%7B%22colId%22:%22Location%22,%22sort%22:%22asc%22%7D ↩︎
2. Kaiser Family Foundation, Counties at Risk of Having No Insurers on the Marketplace (Exchange) in 2018, as of August 9, 2017. http://modern.kff.org/interactive/counties-at-risk-of-having-no-insurer-on-the-marketplace-exchange-in-2018/?utm_campaign=KFF-2017-June-Bare-Counties-ACA-2018-marketplaces&utm_source=hs_email&utm_medium=email&utm_content=53327412&_hsenc=p2ANqtz-97pdQvzWANQ1-bA7fbX7ECEqe-D_khUcPws7LDcgyzm0FzqXGL6gu6WwrThD4lgLzujS44IDmTu3tPrHNwDxK8DylBDw&_hsmi=53327412   ↩︎
3. USA Today, Trump Threatens to End Insurance Payments if No Healthcare Bill, June 29, 2017. https://www.usnews.com/news/us/articles/2017-07-29/trump-threatens-to-end-insurance-payments-if-no-healthcare-bill   ↩︎